Most founders accidentally train their customers never to pay them.
Madhavan Ramanujam, Silicon Valley’s go-to pricing expert who has worked with LinkedIn, Uber, and more than 30 unicorns, calls this mistake the 20/80 Pricing Trap.
The pattern is painfully common.
20 percent of your features drive 80 percent of willingness to pay
Founders give that 20 percent away for free to drive adoption
They are left trying to monetize the remaining 80 percent, the features users do not actually value
The outcome is predictable.
You do not build a business.
You build a charity.
What’s Inside the Episode
In this week’s episode of The Library of Minds, Madhavan joins Dara to break down the science of monetization and deconstruct Profitable Growth, the core framework from his new book Scaling Innovation.
The conversation covers:
Why most startups get pricing wrong from day one
When freemium destroys value instead of creating it
Why pricing models matter more than the price itself
How AI changes pricing through autonomy vs attribution
The biggest pricing mistake founders keep repeating
Why Steve Jobs was a pricing genius
How behavioral pricing can 10× deal size without changing the product
When to trust data and when conviction matters more
This is not a conversation about charging more.
It is a conversation about charging for the right thing.
The Core Insight
Pricing is not a finance problem.
It is a product and strategy decision.
Founders obsess over features, growth, and distribution, then treat pricing as an afterthought. By the time they try to monetize, they have already taught users what the product is worth.
And that number is usually zero.
Step Inside Madhavan’s Mind
Madhavan has created a Digital Mind on Delphi where you can ask him direct questions about pricing, monetization, and profitable growth.
Watch the Episode and Talk to Madhavan’s Delphi
Try asking:
How do I identify the 20 percent users actually pay for?
When does freemium make sense and when does it destroy value?
How should AI products be priced differently?
Delphi
Open your mind.
